Austin Motorsis located inVictoria, British Columbia, and is the only Austin dealer in western Canada. The dealership repairs and restores Austin vintage cars. Hal Irwin, the general manager, is considering changing insurance companies because of a disagreement with LenLegrew, an agent for the Dominion of Canada Insurance Company. Dominion is doubling Austin Motors' liability insurance cost for the next year. In discussing insurance coverage with you, a trusted business associate,Legrewbrings up the subject of contingent liabilities.

Required

Legrew has to write a memorandum to inform Austin Motors of specific contingent liabilities arising from the business. In the discussion, he has to define a contingent liability.